Scott Company Purchased a New Machine on January 1, Year

Essay

Scott Company purchased a new machine on January 1, Year 1, at a cost of $220,000. The machine is expected to have an eight-year life and a $20,000 salvage value. The machine is expected to produce 800,000 finished products during its eight-year life. Production during Year 1 was 70,000 units and during Year 2 was 110,000 units.
Required:
Determine the amount of depreciation expense to be recorded on the machine for the years Year 1 and Year 2 under each of the following methods:Straight-lineUnits-of-productionDouble-declining-balance